BILL ANALYSIS Ó
AB 337
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Date of Hearing: May 27, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
337 (Jones-Sawyer) - As Amended May 21, 2015
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|Policy |Revenue and Taxation |Vote:|8 - 0 |
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Urgency: Yes State Mandated Local Program: YesReimbursable:
Yes
SUMMARY:
This bill allows qualified teachers to claim a personal income
tax credit, not to exceed $250, for instructional materials and
classroom supplies beginning on or after January 1, 2016 and
before January 1, 2021. Specifically, this bill
1)Defines a "qualified teacher" as one that meets the following
requirements, among others:
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a) The teacher worked at least 900 hours in the school year
beginning immediately prior to the taxable year in
California at a K-12 public or charter school; and
b) The teacher was not employed as a qualified teacher
prior to the 2015-16 school year, and has not been a
qualified teacher more than 3 consecutive years.
2)Requires the school in which the teacher works to provide a
certificate establishing the teacher worked at least 900 hours
during the school year, and allows the Franchise Tax Board
(FTB) to request a copy of that certificate.
3)Defines "instructional materials and classroom supplies" as
books, supplies, computer equipment, including related
software, services and other equipment, and supplementary
materials used in the classroom, including supplies for
courses in health and physical education, the amount paid or
incurred for which is otherwise deductible under Internal
Revenue Code Section 162 and not reimbursed.
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4)Allows a taxpayer to carry forward any unused tax credit for
up to five years to offset future tax liability.
5)Establishes specific goals and performance criteria to measure
the credit's success pursuant to section 41 of the Revenue &
Tax Code.
FISCAL EFFECT:
1)Potentially significant GF costs to FTB to administer the
changes to forms and systems.
2)Estimated GF revenue decreases of $3.0 million, $5.9 million,
and $8.5 million in FY 2015-16, FY 2016-17, and FY 2017-18,
respectively.
3)Unknown, but potentially significant reimbursable mandate
costs to schools providing the requisite certificates for FTB
inspection.
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COMMENTS:
1)Purpose. According to the author, this bill enables new
teachers, in their first three years of service, to claim
individual tax credits of up to $250 for expenses relating to
instructional materials and classroom supplies. The author
contends that while the cost to the state is expected to be
modest, the benefits to teachers will be significant,
especially when leveraged with existing federal deductions for
similar expenditures on classroom supplies and materials.
2)Tax Incentive vs Investment in Education. Opponents,
including the California Teachers Association (CTA), argue
K-12 education endured budget cuts of $20 billion over the
recession years, and additional revenues should be spent on
restoring those budgets instead of being used for tax
incentives. CTA asserts schools should be adequately funded
so that teachers do not have to spend personal income to
purchase classroom materials. While this tax credit would be
used for activities benefitting California's public schools,
the effect would be diminished by reducing Proposition 98
funding. The committee may wish to consider whether increased
school funding would be a more efficient approach to achieving
these goals.
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3)Supplying Certificates for School Supplies. Though
certification of teacher eligibility for the credit will ease
the administrative burden for FTB, such requirement creates a
reimbursable mandate to local agencies. Given the minimum
reimbursement claim is $1,000, it seems counterintuitive that
the state would be willing to pay those reimbursement claims
when the same amount could fund $250 worth of school supplies
directly for 4 teachers at a single agency.
4)Prior legislation. AB 2427 (Jones-Sawyer) of 2014 was
substantially similar to this bill, and was held on the
Suspense File of this committee.
Analysis Prepared by:Joel Tashjian / APPR. / (916)
319-2081
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